The trademark infringement trial between French luxury company Hermès and digital artist Mason Rothschild is scheduled to begin on January 30 in a federal court in Manhattan. Both parties allege that the other infringed on their respective trademarks.
Because the nonfungible token (NFT) artist was marketing and selling MetaBirkins, a series of NFTs that was alleged to be inspired by the luxury brand's Birkin bags, the luxury company accused the NFT artist of infringing on its trademark.
On January 14, 2022, Hermès lodged a complaint against Mason Rothschild in the United States District Court for the Southern District of New York, alleging that the artist had refused to stop selling his NFT collection. This event marked the beginning of the trial as well as the related lawsuit that was filed at the same time.
According to papers that were submitted to the court on January 23, Hermès is arguing that the collection has made an illegal use of the Birkin trademark and may have caused clients to believe that the premium brand is affiliated with the initiative.
In the meanwhile, the court documents disclose that Rothschild thinks his work is protected under the First Amendment, which places no restrictions on free speech and prohibits censorship of any kind.
In the days leading up to the trial, several attorneys specialising in intellectual property law and other areas of the law have offered their opinions, stressing that the case may have repercussions for the NFT business.
An associate at the law firm Michael Best & Friedrich LLP named Laura Lamansky referred to the case as a "momentous turning point for Web3 and digital products" in an article that was published on January 18 and discussed the trial as well as its potential repercussions for the future of the NFT business.
The issue that has to be answered is, to what degree are trademarks from the physical world enforceable in the digital realm? "We will be keeping a close eye on this case to see how we can most effectively strengthen rights in the digital world," she added.
"It will hopefully shed some light on how artwork and the First Amendment interact with consumer goods and NFTs and how far a brand's rights in its trademarks or products extend in the digital space," added Lamansky. "It will also hopefully shed some light on how a brand's rights in its trademarks or products extend in the physical space."
Michael Kasdan, a lawyer who specialises in blockchain and technology, has been keeping up with the case as well, although he does not seem to believe the outcome will be very important.
"It's only going to be one district court case data point in the end, but it's certainly going to be an intriguing one," he added.
Companies and brands have started to enforce stricter policies on non-fungible token (NFT) projects, which they believe violate copyright, intellectual property, and trademark laws.
StockX was accused of committing trademark infringement on February 4, 2022, when Nike filed a lawsuit against the online reseller for the purported creation of NFTs that were modelled after Nike's shoes.
After a base-layer blockchain provider, Secret Network, announced the auction of "uncut screenplay scenes" from Tarantino's 1994 film Pulp Fiction as NFTs, film director Quentin Tarantino settled a lawsuit filed by Miramax in September 2022. The lawsuit had been filed after Secret Network announced the auction.